What happened this week: Business was slower than in the previous weeks. Not surprising considering, that the Asian customers will wait now for the suppliers who are going to visit them on occasion of their trips to Asia. In addition we have to accept, that the customer base in Asia has been very active for the past weeks and prices have gone up in the meantime by quite a bit. Consequently is a break and consolidation more than normal and also desirable for the moment. The European customer base is returning and waking up very slowly. Phone calls to gather some market information are coming in and just short term and individual sales were concluded. So, total sales were significantly less than in the previous weeks but in view of the volumes moved in the weeks before not any reason for any kind of concern. Prices obtained were on steady levels and if one had a good timing throughout the week there was a chance to benefit from the firmer USD again. From the EU

customers a lot of resistance was displayed against higher prices. Well, who is voluntarily paying more….., but at the end moderate and reasonable increases were accepted. The question remains now what is going to happen in September. The situation in the continental European trade is very complicated. Due to the closure of a large Dutch abattoir and  fresh hides leaving now to Denmark the market equilibrium is temporarily disturbed. One may not forget, that this has nothing to do with ‘the hide market’ and global business in general, but buying and production could be affected temporarily and will disturb the production flow for a while. Sometimes this is creating tensions in the abattoir buying and it could require an unknown period of time until the unrest is settling again. It seems, that unrest in the German abattoir market is becoming a common issue every year in August. Not an ideal time, considering, that we are in the period where the trend for the next 6-8 months for the leather industry is set and everyone is demanding for a high level of planning security for the coming

months. During September a lot of trade shows are taking place which hopefully will give us the directions for the market and demand for the last quarter of 2003. The kill: No changes. The levels remain still very low and the improvement did not continue. The school holidays in the large German Federal States are still lasting for another two weeks before normal live is going to resume throughout the whole country. Due to the draught conditions we had, there are opinions that farmers could be short of feed and this could lead to higher slaughter.  What do we expect?  Also next week we expect not too much activity as such. Some sales can be expected from European tanners and the trips to Asia will also result in some activity. However, in total we don’t think, that the activity in the coming weeks will be more than normal. Only after all the trade shows towards the end of the month tanners will have to review their raw material needs, unless we will see an unexpected early placement of orders for the Xmas season already in the coming weeks. For the next weeks we expect a steady market with a firmer undertone.